a. Should labor variances be based on the planned volume of 8,700 dolls or the actual volume of 9,500 dolls? b. Prepare a table that shows the standard labor price, the actual labor price, the standard labor hours, and the actual labor hours. c. Compute the labor price variance and indicate whether it is favorable (F) or unfavorable (U).
a. Should labor variances be based on the planned volume of 8,700 dolls or the actual volume of 9,500 dolls? b. Prepare a table that shows the standard labor price, the actual labor price, the standard labor hours, and the actual labor hours. c. Compute the labor price variance and indicate whether it is favorable (F) or unfavorable (U).
Chapter8: Standard Costs And Variances
Section: Chapter Questions
Problem 7PB: Marymount Company makes one product. In the month of April, it made 3,500 units. Workers were paid...
Related questions
Concept explainers
Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
Topic Video
Question
Transcribed Image Text:16
Fanning's Doll Company produces handmade dolls. The standard amount of time spent on each doll is 1.50 hours. The
standard cost of labor is $7.71 per hour. The company planned to make 8,700 dolls during the year but actually used
13,650 hours of labor to make 9,500 dolls. The payroll amounted to $110,156.
Required
a. Should labor variances be based on the planned volume of 8,700 dolls or the actual volume of 9,500 dolls?
b. Prepare a table that shows the standard labor price, the actual labor price, the standard labor hours, and the actual
labor hours.
c. Compute the labor price variance and indicate whether it is favorable (F) or unfavorable (U).
d. Compute the labor usage variance and indicate whether it is favorable (F) or unfavorable (U).
Complete this question by entering your answers in the tabs below.
Req C
and D
Req A
Req B
Should labor variances be based on the planned volume of 8,700 dolls or the actual volume
of 9,500 dolls?
Labor variances should be based
on the
< Req A
Req B >
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 4 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Principles of Accounting Volume 2
Accounting
ISBN:
9781947172609
Author:
OpenStax
Publisher:
OpenStax College
Principles of Accounting Volume 2
Accounting
ISBN:
9781947172609
Author:
OpenStax
Publisher:
OpenStax College